Ares Management is closing in on a deal for a controlling stake in AMP Ltd.'s asset management business, according to people with knowledge of the matter.
Ares, which earlier this month abandoned a A$6.4 billion ($5.1 billion) bid for all of AMP, has been negotiating over the asset management business for the past couple of weeks, said the people, asking not to be identified as the matter is private. A deal could value the asset management business at more than A$3 billion and AMP would retain a minority stake, the people said.
An announcement could come as soon as next week, the people said. There's no guarantee on timing and the deal could still collapse, they added. Representatives for AMP and Ares declined to comment.
AMP CEO Francesco De Ferrari said Feb. 11 that the company was engaged in discussions over the future of its asset management unit, and options included a potential partnership as well as a full sale. During an earnings call with analysts on the same day, Ares CEO Michael Arougheti reiterated his firm's interest in acquiring AMP Capital's money management business.
AMP Capital accounts for more than a third of the underlying earnings at the wealth manager and is one of the largest direct real estate investors in Asia with A$28 billion in assets. The business also manages infrastructure assets for third-party owners.
A deal could bring some relief for long-suffering AMP shareholders who endured a series of scandals and boardroom upheaval before the company effectively put itself up for sale last year. AMP shares are valued at just a quarter of what they were three years ago, giving Australia's oldest wealth manager a market value Tuesday of A$4.7 billion in Sydney.
Staff writer Arleen Jacobius contributed to this story.